Transparency Groups Assail Bribery Act Delay

Anti-bribery groups lashed out against a reported second delay of the implementation of the U.K. Bribery Act.

Calling it “disastrous news,” the head of Transparency International U.K. said the government has “failed” in its commitments to getting the law into effect as it said it would. (WSJ’s Law Blog is also on the story.) The landmark law was already delayed once before to allow for the publication of guidance on a provision concerning “adequate procedures” defense.

The new delay, which has no timeframe according to the initial report from the Financial Times (sub. req.), means the law will come into effect “three months” after the guidance is published. That guidance was scheduled to be finished by Monday, and the law was scheduled to go into effect at the end of April. The delay indicates that deadline has been missed, and it’s unknown when the guidance will be released.

“This raises serious doubts about the credibility of the government’s commitment to the Bribery Act, which was passed in the last Parliament on the basis of an all-party consensus,” said Chandrashekhar Krishnan, head of Transparency International U.K. in a statement. “This delay creates unnecessary uncertainty for these companies and exposes the Government to international criticism that it is not serious about combating corruption.”

The Bribery Act goes farther than its well-worn counterpart, the U.S. Foreign Corrupt Practices Act, by banning private bribery in addition to public bribery, creating a separate bribery offense for corporations and providing guidelines for harsher sentences.

But by delaying its implementation, Alexandra Wrage, head of the Annapolis, Md.-based business anti-bribery group TRACE International, said the U.K. “risks losing much of the ground it gained” by passing the law in the first place.

“There have been doubts about the political will and commitment of resources behind this law, and those concerns are renewed today,” she said.

Barry Vitou of Winston & Strawn, writing at Thebriberyact.com, thinks the delay will only be for a couple of weeks, not months, He spoke to Richard Alderman, the head of the U.K. Serious Fraud Office, which will be in charge of enforcing the law, who told him that the agency looks forward to getting the guidance out and that he was concerned companies acting ethically are being disadvantaged by the delay.

The decision comes after withering criticism of the law from some of the U.K. press, as well as by business groups. John Cridland, the new head of the Confederation of British Industry, the U.K.’s largest business group said on television Monday that the law was “not fit for purpose.”

Legal compliance experts said the U.K. should have seen the difficulty in writing the guidance coming, however.

“Companies that have been dealing with FCPA compliance already know how difficult many of the practical, day-to-day issues can be. This delay signals that U.K. officials are now confronting that same difficulty,” said Aaron G. Murphy, of Latham & Watkins LLP. “Having written a safe harbor for adequate compliance programs into their statute, they are now bound to offer something much more detailed than the high-level compliance platitudes previously offered. They seem to be discovering just how difficult that task is.”

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